1. Trump today imposed 30% tariffs on silicon solar panels imported into the US. This is dumb and avaricious, and will hurt the solar industry in the US. But, at most, it's a temporary speed-bump. Here's why.
2. Today, at utility scale (how most solar is deployed), solar modules make up around 1/3 of the total system cost. The rest is so-called "soft costs" - framing, land, labor, trackers, inverters, wiring, etc.. Raising the cost of modules by 30% raises total cost maybe 10%.
3. A 10% cost increase puts the total cost of utility-scale silicon solar in the US... back to where it was in late 2015 or early 2016.
At current pace of cost reduction, in another 1.5 years, costs will be back down to where they were last month.
At current pace of cost reduction, in another 1.5 years, costs will be back down to where they were last month.
4. This tariff only applies to *silicon* solar panels. It does not apply to the thin film panels that the #1 US solar developer, First Solar, uses. First Solar will see no rise in their prices. Expect them to gain market share. That's why their stock is up tonight.
5. Utility scale solar is ~70% of US solar, so that's what I've talked about first. But at commercial/industrial and residential scales, this matters even less.
At residential scale, panels are maybe 1/8th or 1/10th of total price. This tariff will raise prices by a few %.
At residential scale, panels are maybe 1/8th or 1/10th of total price. This tariff will raise prices by a few %.
6. None of this is to voice even the tiniest bit of support for Trump's move on tariffs. It's stupid, job destroying, bad for the planet, etc.. We need to be moving faster, not slower. It will cause real damage to the solar industry for a couple years.
But it won't stop solar.
But it won't stop solar.
